Supplier Portfolio Selection and Optimum Volume Allocation: A Knowledge Based Method

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Aziz, Romana and Hillegersberg, Jos van (2010) Supplier Portfolio Selection and Optimum Volume Allocation: A Knowledge Based Method. In: Pioneering Solutions in Supply Chain Management. A Comprehensive Insight into Current Management Approaches. Erich Schmidt Verlag, pp. 105-126.

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Abstract:Selection of suppliers and allocation of optimum volumes to suppliers is a strategic business decision. This paper presents a decision support method for supplier selection and the optimal allocation of volumes in a supplier portfolio. The requirements for the method were gathered during a case study that was conducted within the logistics unit of Shell Chemicals Europe. The proposed method is based on the classical view by Sprague and Carlson of sequence and interaction of the different phases of decision making in a decision support system and supports Kraljic’s portfolio approach for supplier management. This method aims to help the managers in making decisions on the allocation of volumes to suppliers while simultaneously trying to satisfy conflicting objectives of improvement in benefit and reduction in risk. A mathematical model to struc-ture the problem is presented, knowledge elicited from the managers is used to parameterize the mathemati-cal model and a multi-objective, hierarchical optimization procedure produces ‘trade-off’ outputs. The man-agers can also conduct interactive post optimization ‘what-if’ analysis
Item Type:Book Section
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Management and Governance (SMG)
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Link to this item:http://purl.utwente.nl/publications/77526
Conference URL:http://www.hicl.org/previoushicl.php
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